Investing activities reflect ones company purchases or sales of capital assets. Financing activities reflect companies purchase or sale of stock and proceeds from or amounts given on debt financing. Without a positive cash operations, a company or a firm would have to borrow money from outside to run the business. And chances are that it can lead to losses and closure of business. Thus mentioned is a financial statement that shows the flow of money coming in and going out and so it should be prepared with utmost diligence. Hence, one must primarily know how to make a cash flow statement.
Creditors are entities who have given credit to any organization. People and institutions like banks can act as creditors. As the company has to pay back the amount, that is shown as a liability in the balance sheet. Creditors are of two types one being real and another personal.
Individuals who give loans to friends, families or people with close relations are pronounced as personal trustee and banks or financial institutions who have real contracts with their customers are called real creditors. Creditors charge interest for the loans given by them.
Profit is very much essential to run a business for a long period. When a business is formed, it shall not be necessary that profits start generating from the first day itself. It takes a long to generate profits based on types of business entities. Businesses or firms with limited capital investment might generate profits within short span of time. Whereas firms with heavy capital investments, would take a long time to generate profits.
Real tellers most often request for collateral such as homes, vehicles etc for providing loans. So that when the loan is not paid, the borrowers can be taken to court and the collateral can be recovered for the loans paid. Personal loan givers who are not able to recoup the amount, can claim short term gains over return on income tax filing.
Big companies with more predictable profits are the best dividend payers. These companies give regular dividends as their motive is to maximize shareholder wealth. Dividends would be declared by it and this would be distributed to its stockholders on a proportional rate. People with more shares will get more dividends and who have less shares will get less dividends.
People like them have responsibilities towards stockholders and creditors. But at times management may approach these expert people to manipulate the figures to show more profits, so that investments made in the company by other institutions does not halt or go slow.
While some investments are able to make money within a short time period, others take a long time to grow. People who take the advice of professionals would have to pay their service charges. Investors who are able to take huge risks will invest in stocks, foreign exchange and futures trading.
Besides investors, those who are not willing to take risks will invest money in debt funds like bonds which gives less return. A person who invests for a longer period is called an investor. An individual who invests for a shorter period is called a trader. Every function has its own significance.
Creditors are entities who have given credit to any organization. People and institutions like banks can act as creditors. As the company has to pay back the amount, that is shown as a liability in the balance sheet. Creditors are of two types one being real and another personal.
Individuals who give loans to friends, families or people with close relations are pronounced as personal trustee and banks or financial institutions who have real contracts with their customers are called real creditors. Creditors charge interest for the loans given by them.
Profit is very much essential to run a business for a long period. When a business is formed, it shall not be necessary that profits start generating from the first day itself. It takes a long to generate profits based on types of business entities. Businesses or firms with limited capital investment might generate profits within short span of time. Whereas firms with heavy capital investments, would take a long time to generate profits.
Real tellers most often request for collateral such as homes, vehicles etc for providing loans. So that when the loan is not paid, the borrowers can be taken to court and the collateral can be recovered for the loans paid. Personal loan givers who are not able to recoup the amount, can claim short term gains over return on income tax filing.
Big companies with more predictable profits are the best dividend payers. These companies give regular dividends as their motive is to maximize shareholder wealth. Dividends would be declared by it and this would be distributed to its stockholders on a proportional rate. People with more shares will get more dividends and who have less shares will get less dividends.
People like them have responsibilities towards stockholders and creditors. But at times management may approach these expert people to manipulate the figures to show more profits, so that investments made in the company by other institutions does not halt or go slow.
While some investments are able to make money within a short time period, others take a long time to grow. People who take the advice of professionals would have to pay their service charges. Investors who are able to take huge risks will invest in stocks, foreign exchange and futures trading.
Besides investors, those who are not willing to take risks will invest money in debt funds like bonds which gives less return. A person who invests for a longer period is called an investor. An individual who invests for a shorter period is called a trader. Every function has its own significance.
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